LONDON: Prince William and his wife Kate announced on Monday that their new baby princess will be called Charlotte Elizabeth Diana, as the sound of gun salutes and bells pealing rang out over London.

Britain has been on tenterhooks waiting to discover what names the Duke and Duchess of Cambridge would give their little princess, who was born on Saturday and is fourth in line to the throne.

The names announced after two days of feverish speculation will be interpreted as a tribute to William's parents and Queen Elizabeth II.

Charlotte had been the bookmakers' late favourite and will be seen as a tribute to William's father Prince Charles, being the feminine form of the heir to the throne's name.

Great-grandmother Queen Elizabeth II has yet to meet the latest addition to the royal family, but the first middle name is a clear link to the sovereign.

She has been on the throne since 1952 and is set to become Britain's longest-reigning monarch on September 9, overtaking Queen Victoria.

Many royal watchers hoped the baby would carry the name Diana after William's late mother, whose death aged 36 in a car crash in Paris in 1997 prompted a global outpouring of grief.

Diana gave birth to William in the same hospital where Kate delivered Charlotte.

When William proposed, he gave Kate Diana's sapphire and diamond engagement ring, and as usual she wore it on Saturday, when it was clearly visible in pictures of her holding baby Charlotte.

Gun salutes in celebration

“The Duke and Duchess of Cambridge are delighted to announce that they have named their daughter Charlotte Elizabeth Diana,” said the brief statement from their official residence, Kensington Palace.

“The baby will be known as Her Royal Highness Princess Charlotte of Cambridge. “Diana's brother Earl Charles Spencer, who memorably delivered the eulogy at her funeral, said they were “perfect names”.

“My 2-year old Charlotte Diana will be thrilled at cousinly name-sharing.

Is at an age where thinks world revolves around her!” he tweeted.

The name Charlotte, which is also the middle name of Kate's sister Pippa, has historic royal standing.

King George III's wife Queen Charlotte (1761-1818) was an amateur botanist who used her middle name instead of her first name Sophie.

Their son King George IV named his only child Princess Charlotte but she died following childbirth at the age of 21 in 1817.

According to the Office for National Statistics, Charlotte was the 21st most popular name for girls in England and Wales in 2013.

The name announcement came an hour after gun salutes rang out in London to celebrate the birth.

Forty-one shots were fired from World War I-era field guns in Hyde Park after a military band played Stevie Wonder's hit “Isn't She Lovely”, a song he wrote to celebrate the birth of his daughter, Aisha.

The field guns were pulled by horses in a military procession that went past Buckingham Palace.

Artillery units at the Tower of London also fired a ceremonial 62-gun salute at the same time, with the boom reverberating across the River Thames.

The standard royal salute is 21 rounds — a tradition dating back to cannon fire from ships — and an extra 20 are fired from a royal park or residence. At the Tower of London, a further 21 rounds were added on to show the city's loyalty to the sovereign.